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$2.21 magellan global fund.

I sold my entire position yesterday. This was a big win for me...

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Hoarding

376 Posts.

24

14/11/23

08:01

Post #: 70880769
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Originally posted by Hoarding: ↑

All well known points.

The size of MGF is only $2.5B. Magellan's overall FUM is 45B$. What would outflows be on MGF if it merged into open class ETF tomorrow? Maybe $1B?

The current open class ETF MGOC.asx has $7.5B FUM.

The persistent discount on MGF is not worth all of the investor relations drama.

Management would accept a $1B FUM drop given,
It is the ethically right thing to do
It allows 'trapped' investors to leave (this isn't a healthy relationship in which to build long-term clients)
It would have a positive impact of Magellan's now damaged image
They wouldn't have to allocate resources to investor relations specific to dealing with client discount concerns
The fund could be a target for another manager (eg. Wilson, Regal etc.). Having $1.5B FUM ($2.5B current MGF FUM less the $1B outflow on conversion) is better than zero.

I am certain of either one of the below happening in 2024 (once options expire):
1. The discount will be minimal
2. The fund will convert to an open class ETF (they will just merge MGF with MGOC).

Hotcopper should introduce a bet feature where users can take public, direct positions against each other.

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I sold my entire position yesterday. This was a big win for me after playing out close to how I expected.
MGF Price at posting: $1.84 Sentiment: None Disclosure: Not Held
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